Budgeting for war

September 25, 2002

NO ONE PUTS A PRICE limit on national security. Any voices raised in Congress against President Bush's plan to launch a military strike against Iraq won't base their opposition on the grounds that it would cost too much money. But the price tag is expected to be huge, and supporters of this new war need to figure out how the country can pay for it.

The federal budget already sports a deep deficit. The economy is limping along. The stock market once again is in a swoon. And many pressing domestic needs, perhaps topped by drug coverage for Medicare beneficiaries, have been put off.

None of these other concerns has prompted Mr. Bush to reconsider cutting taxes for the wealthiest 1 percent of Americans. Financing the war should finally make the case for him -- if only to show nervous investors he is taking a clear-eyed approach to managing the economy.

As The Sun's Tom Bowman reported this week, military experts calculate that a successful campaign to oust Saddam Hussein would mark only the beginning of a lengthy U.S. occupation of Iraq that could require 100,000 troops.

Rep. John Spratt of South Carolina, senior Democrat on the House Budget Committee, estimates that the 10-year cost of an Iraqi offensive could reach $200 billion. The initial military operation alone would cost $48 billion to $93 billion, Mr. Spratt says.

The rest of the money would support the occupation forces, provide humanitarian assistance and pay off potential allies who need financial inducements to stand with us. An additional cost to the U.S. economy would likely come through higher oil prices because of disrupted supplies.

Lawrence Lindsey, Mr. Bush's chief economic adviser, offered a similar estimate of the war cost in an interview with The Wall Street Journal. He dismissed the amount as insignificant in the context of a $10 trillion economy.

But consider this: Congress will be unable to complete its fundamental task of approving spending plans for the fiscal year that begins next week, largely because Mr. Bush and the lawmakers are locked in a pitched battle over $9 billion for domestic needs.

The president's admirable tight-fistedness should be applied more broadly and with more enthusiasm over the long term.

With the economy in the tank, tax cuts and deficit spending are not so bad, maybe even healthy. Mr. Bush has a responsibility, though, to at least put the nation on a path toward a balanced budget if he wants to restore the investor confidence that is so critical both to financial markets and to the economy as a whole.

A good way to do that would be to rescind last year's tax cuts for the richest of the rich -- particularly, elimination of the estate tax. Most of that $1.35 trillion tax cut package has not yet taken effect.

Additional income tax rate reductions scheduled for middle- and even upper-middle-income taxpayers could take place as scheduled over the next few years, and there would still be enough money to finance the war and fashion a Medicare drug benefit.

It's no wonder that investors are wary. With a divided government on the verge of congressional elections, the federal budget process has all but completely broken down. Mr. Bush should offer a plan to fix it.

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